Holding

The High Court cannot substitute its own award for that of the Industrial Tribunal; its order is set aside and the Tribunal's award of reinstatement with half back wages is restored.

Summary

Jitendra Singh Rathor, a librarian, was terminated for misconduct and filed a complaint before the Industrial Tribunal under Section 33A of the Industrial Disputes Act, 1947. The Tribunal held that although misconduct was proved, termination was unwarranted and ordered reinstatement with half of the back wages. The employer appealed to the Patna High Court under Article 227, which vacated the reinstatement, directed payment of Rs.15,000 as compensation, and held that withholding half the back wages was merely a condition of reinstatement, not a penalty. The appellant appealed to the Supreme Court, which held that the High Court exceeded its jurisdiction of superintendence and could not substitute its own award for that of the Tribunal. The Supreme Court set aside the High Court order, restored the Tribunal's award, and directed reinstatement with the half back wages as ordered, along with full back wages from the date of termination and interest.

Issues considered

Whether a High Court exercising jurisdiction under Article 227 can set aside or modify an award of an Industrial Tribunal regarding reinstatement and back wages.
Whether withholding half of the back wages as a condition of reinstatement amounts to a penalty permissible under the Industrial Disputes Act.
Whether the Tribunal’s discretion under Section 11A of the Industrial Disputes Act is wide enough to order reinstatement with partial back wages despite a finding of misconduct.

Legislation cited

Constitution of Indias. Article 227
Industrial Disputes Act, 1947s. 11A, s. 33A

Subjects

industrial disputetermination of servicemisconductreinstatementback wagesArticle 227superintendenceIndustrial Tribunalcompensationwide discretion

Judgment

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"

223·

' JITENDRA SINGH RATHOR

v.

SHRI BAIDY ANA TH AYURVED BHAWAN LTD. & ANR.
A

<
March 15, 1984

(D.A. DESAI AND RANGANATH MISRA, JJ.]

labour law Service~ of Employee·-Termination on charge -of misconduct-
Industrial Tribunal finding charge of misconduct proved-Reinstatement with half
of back wages ordered-Employer apprOaching High Court-High Court vacating
c
order of .reinstatement and· qualltifying compensation at RS. •15000-.Interference
by High Court whether valid aud legal.
•
Constitution of India 1950, Art 227

Juri.,diction of High Coul't to interfere with the award of an Inddstrial TrilYunal D
-When arises. •

Industrial Disputes Act 1947, Section I IA.

Employee's" services terminated on account of misconduct-Jurisdiction of
IndUst;ial Tribunal to grant relief-Explained.

The appellant was employed as a Librarian under the 1st respondent. His
services were terminated for misconduct. He laid a Complaint before the Indus·
trial -Tribunal under section 33A ·of the Industrial.Dispures Act, 19.47. The
Tribunal came to the conclusion that though the charge ot misconducteagainst
the appellant was establishCd, the punishment of termination of service was not
p
warranted, ordered reihstatement with half of his back wages and other benefits
(
from the date of termination .

.,4 The respond<nt-employer applied to the High Court under Article 227 to
i quash the direction of reinstatemellt contending that as the Tribunal had found
misconduct on the part of the Workman, it was obligatory for the Tribunal to
impose some punishment which it had failed to do. It was fQrther contended .G
that as there was las), of confidence, reinstatement was not appropriate. The
High Court held that with-holding of.50 per cent of the back wages was a con-
dition ofteinstatement and wa~. not by way of pµnishment, held that reinstate-
ment was no_t called for, vac.ated-the Oroe~ of reinstatement, direCted payment
of compensation to the respondent workman in lieu of reinstatement and quanti-
/!\ . fied the compensation at Rs. 15,000.
Allowing.th• appeal.
•
•

224 SUPREME COURT REPORTS (1984] 3 s:c.R.

. HELD :. I. The order of the High Court is set aside and.the award of the
Industrial Tribunal is restored. The High Court had no justification to interfere
with lhe direction regarding reinsiaten1eut to S'~tvk:~ and in pr0cceding to~substi~ •..
• tute the directiqn by· quantifying conipensation at Rs. 15000 it acted without
any legitimate basis. [228D, 22711, 228A]

B 2. Section llA of the InduStrial Disputes-Act, 1947 vests wide discretion in
·the Tribunal, and in a given case oµ. the facts established 'th~ Tribunal cari
Vacate -the order of dislnissal or .discharge and . give suitable directiOns. It is a
well-settled principle of law --that when an order of tetmination of service is
found to be bad and reinstatement ·is directed, the wronged workman is ordi-
.• n'arily entitled to full back wages Unless for any particular reason the whole or a
part.of it is asked to be withheld .. The Tribunal while directing reinstatement
c and keeping the delinquency in view could withhold payment of a part or the
whole of. the back
'
wages.· [226G, 227AJ '

3. The High Court under Article 227 of the Constitution does not enjoy
the wide discretion vested in the Tribuna1 under-,section· llA, though as a su-
perior court, it' is vested With the· right Of superintendence. The High Court ~Sin
disputably entitled to scru!inize the orders of the subordinate tribunals within the
D well itcepted limitations and it could in an approprial.e c_ase quash the award
of the Tribunal and thereupon remit the matter tQ it for' fresh dispOsal in accor-
dance with law and directions, if ahy. The High Court is not_ entitled to exercise
the powers of the Tribunal clod substitute an award in.p}ace of the one made by
the Tribunal as in the case of an appeal where it lies to it. [227D] ·

E • CtVIL APPELLATE JURISDICTION ... Civil. Appeal No. 108
of 1984.

From the Judgment and Order dated 4.3.83 of the Patna High
Court in C.W.J.C. No. 3490 of 1979.

F M.K. Ramamurthi and A.S/iaran for the Appellant.

S. N. ·Singh for the Respondents.

The Judgment of the Court was delivered by
) '°'
G -RANGANATll MISRA, J. The· workman is .in ~ppeal after·
obtaining leave uuder Article· 136 of the Constitution from this
Court. The appellant was working as librarian under the respondent·
employer.. His services were terminate!\ on May 24, 1977, on pay_.
'ment of a month's 'salary. The appellant laid a complaint before
the· Industrial Tribunal under section 33A of the Industrial Disputes
H
Act,. 1947 · (hereinafter referred to as 'the Act') and. the Tribunal
• yall\e to find on hearing parties· that though the charge· of misconduc
.,
1. s. RATHOR v. BAiDYANATH AYURVED (Ranganath Misra, J.) 225
) .
.. within the meaning of clause 16(iii) (a) of the Standing Orders had A
been established, punishment of termination of service was not
warranted. Accordingly, reinstatement was ordered.· The direction
of the Tribunal ran thus:
;
"Considering the facts and circumstances of the case
and evidence on record I direct the opposite party (employer) B
to reinstate the.complainant (appellant) with half of his back
wages and other benefits from the date of termination of his
service (24.5.1977) within one [month from ·the date of
pronouncement of this award." •
The employer applied to the High Court under Article 227 of
c
the Constitution to quash the direction of reinstatement ·and in
support of the stand it was contended that as the Tribunal had found
misconduct on the part of.the workman, it was obligatory for the
Tribunal to impose some punishment which it had failed to do. The
employer also took the position that there was loss of confidence D
and reinstatement was not appropriate. Th.e appellant maintained
that though under the law he was entitled to full Back wa11es upon
reinstatement, the Tribunal had directed witpholding a moiety of it
in view of its finding that misconduct had been established. •The
High Court came to hold that withholding of 50 per cent of the back.
wages was a condition of reinstatement and was ·not by way of
punishment. The High Court observed:

"The two poyiers under section I IA ate alternative; the
first is to direct reinstateme11t of the workman on such terms
and conditions as it thinks fit and the second is to give 'some
other relief to the worklllan in eluding the award of any lesser
punishment in lieu of reinstatement as the circumstances of
the case may require. Under the second alternative, the
Tribunal may instead of directing reinstatement give the
relief of compensation to the workman or award a lesser
punishment. ... It was for the Tribunal, therefore, to decide
G
as to which of the two alternatives it should a'dopt. But the
Tribunal is always bound to exercise its discretion judicially
and decide to adopt either the first course to direct reinstate-
ment on such terms ~and conditions as it thinks fit or the
0, second course to award a lesser punishment in lieu of
I reinstatement as the circtmstances of the case may require. H
· The order of re.instatem• with half back wages is an order
pf the firs\ 9ategory and nQt of the second category. The
\ . :
226 _SUPREME COURT REPORTS [1984) 3 S.C.R •..

A , payment of only half of the back "'ages is a cc 'dition of the
..
reinstatement and not a punishment for the mi;conduct of the ·
work~an. '~ .': · · ·

• The High. Court then came to the conclusion
· ·
..tha~
the ci~der of.
·

reinstatement was not called for a~d proceeded to indicate: '
B ,. • ~ • ~ • • r•

"The question now is sho~ld the award be set aside and
the case be remitted back to the Tribunal for a fresh deter-
·millation of.the inatter in acco.fdance with law of Should ,the
. proceeding be concluded by making a reasonable modification .
c ·in the award of the Tribunal?" · · ' ·· · · ·
.
. ,, The High C~urt thereafter vacated th.; order of reinstatement·
holding that ends of justice would be served by directing payment of
. compe_nsation to·the rcspondent·wi:irkman in· lieu of reinstatement··
and quantified th~ compensation at Rs .. 15,000. · This··modification.
D by the. High Court . is assailed in appeal at :it-he· instance of the
workman. · · · ·
. . .
Section llA of the Act provides : ·
-
•
E. "Where an
industrial dispute relating to the dis~harge
or dismissal of a workman has ·.been referred 'to· a Labour
• Court, Tribunal· or National Tribunal. for adjudication ·and, in·
the course of the adjudication proceedings, the Lab.our Court,
Tribunal or National Tribunal, as the case may be, is satisfied ·
that the order of. discharge or dismissal was not justified, it ·
F·. may, .by its award,' set aside the order of discharge or dismissal
and direct reinstatement of the workman on such terms and
ccinditions, if any;•as it thinks fit, or give such other relief io.
. .
. the workman including the award of any lesser punishment iri'
lieu of discharge or dismissal as the circumstances of the case
may require." '
c·
. . Wide discretion i• vested in the Tribunal undef this p~ovision
· and in a given case on the facts established the Tribunal can vacate.
·the order of dismissal or discharge and ·give suitable directions.. It
· is a well-settled principle of law that when an · order of termination .
H of service is. found . to. be bad 'and. reinstatement is directed, th e
wronged workman is ordinarily entitled to full. back wages unless
.for ·any particular reason the whole ·or Oa. part of it is asked. to he

'.
•

1.§. itA'tHOR v. BAIDYANATH AYURVIID (Ranganath Misra, J.) 227
)
withheld. The Tribunal while directing reinstatement and keeping A
the delinquency in view could withhold payment of a part or the
· whole of the back wages. In our opinion, the High Court was right
in taking the view that when payment of back wages either in full or
part is withheld it amounts to a penalty. Withholding of back wages
to· the_ extent of half in the facts of the case was, therefore, by way
of penalty referable to proved misconduct and that situation could · B
not have been answered by the High Court by saying that the relief
< •
of reinstatement was being granted on terms of wi.thholding of half
of the back wages and; therefore, did not constitute penalty.

Under Section llA of the Act, advisedly wide discretion has c
been vested in the Tribunal in the matter of awar_ding relief according
to the circumstances of the case'. The_ High Court under Article 227 •
of the Constitution does not enjoy such power though as a superior
''\.-< court, it is vested with the right of superintendence. The High
Court is indisputably entitled to scrutinii;C the orders of the subordi-
nate tribunals ·within the well accepted limitations and, therefore, it D
could in an appropriate case quash the award of the tribunal and
•
thereupon remit the matter to it for fresh disposal in accordance
with law and directions, if any. The High C Ui t is not 'entitled to
exercise the powers of the Tribunal and substitute a;i award in place
· oi the one made by the Tribunal as in the case of an appeal where it
-._ lies to it. In this case, the Tribunal had directed reinstatement, the E
.r High Court. vacated the direction of reinstatement and computed
compensation of Rs. 15,000 in lieu of restoration of ser, ce. We
are not impressed by the reasoning of the High Court that reinstate-•
• ment was not justified when the tribunal in exercise of its wide
discretion given under the law found that such relief would meet the
F
ends of justice. The Tribunal had not recorded a finding that there
was loss of confidence of the employer. The job of a libraian does
> not involve the necessity. of enjoyment of any special confidence of
,; the employer. At any rate, the High Court too did not record a
finding to that effect. Again, there is QO indication in the judgment
of the High Court as to how many years of service the appellant had G
put in and how many years of service were still left under the Stan-
•
ding Orders. The. salary and other service benefits which th~
appellant was receiving also did not enter into the consid_eration of
-,
/
the High Court while '<omputing the compensation. · We are, there-
.
fore, of the view thaf the High Court had no justification to interfere
with ~e direction regardi!lg reinstatement to service and in procee-
228 SUPR.~MB COURT REPORTS {1984] 3 S.C.R.
A ding to substitute the direction by quantifying compensation of
Rs. 15,000 it acted without any legitimate basis.

Mr. Prasad for the respondent no. 1 invited our attention to the
fact that the High Court was cognizant of the necessity of a remand
·. but taking into consideration the delay involved and the fact that a re-
B mand was unnecessary in view of ihe nature of the~order it was going
·to .make took upon itself to give a final decision. We reiterate that
ordinarily it is not for the High Court in exercise of the jurisdi-
ction of superintendence to substitute one finding for another and
' ,
similarly one punishment for another. We may not be understood to.
have denied that power to the High Court in every type of cases.
c It is sufficient for our present purpose to hol.d that on the'.facts made
•out, the approach of the High Court was totally uncalled for and
the manner in which the compensation was assessed by vacating
the_order ofreinstatement is erroneous both on facts and in law.

D The appeal, therefore, is :!!lowed and the order of t)le High
· .Court is set aside and the award of the Industrial Tribunal is restored.
The appellant became entitled to reinstatement within a month from
November 24, 19]9, when the award was made. He would, there-
fore, be entitled to full wages and other service benefits from
December 24, 1979, taking the month's allowance given in the award-
E into account .. He would also be entitled to the half of the -back •
wages in terms of the award from May t4, 1977 till December 23,
1979. We direct the Tribunal to compute the amount so due as
back wages and the appellant is entitled to 12 per cent interest on
the siim from January 1, 1980, till payment. The appeal is allowed
p
with costs. Hearing fee assessed at Rs. 2000. •
• N.V.K. Appeal allowed.
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